The Pressure Is on for Big Tech to Regulate the Broken Digital Advertising Industry

December 2, 2024:

Digital advertising is a whopping $700 billion (£530 billion) industry that remains largely unregulated, with few laws in place to protect brands and consumers. Companies and brands advertising products often don’t know which websites display their ads. I run Check My Ads, an ad tech watchdog, and we constantly deal with situations where advertisers and citizens have been the victims of lies, scams, and manipulations. We have removed ads from websites with serious disinformation about Covid-19, false election content, and even AI-generated obituaries.

Currently, if a brand wants to advertise a product, Google facilitates the ad placement based on desired ad reach and metrics. It may technically follow through on the agreement by delivering views and clicks, but does not provide transparent data about how and where the ad views came from. It is possible that the ad was shown on unsavory websites diametrically opposed to the brand’s values. For example, in 2024, Google was found to be profiting by placing product ads on websites that promoted hardcore pornography, disinformation, and even hate speech, against the brands’ wishes.

In 2025, however, this scandal will end, as we start to enact the first regulations targeting the digital advertising industry. Around the world, lawmakers in Brussels, Ottawa, Washington, and London are already in the early stages of developing regulation that will ensure brands have access to the legal support to ask questions, check ad data, and receive automatic refunds when they find that their digital campaigns have been subject to fraud or safety violations.

In Canada, for example, Parliament is deliberating the enactment of the Online Harms Act, a law to incentivize the removal of sexual content involving minors. The idea behind this law is that if the content is illegal, then making money off it should be illegal, too.

In California and New York, advocates are also proposing legislation that will aim to implement a know-your-customer law to track the global financial trade of advertising. This is significant because these two states power the global ad tech industry. New York has more ad tech companies than any other city in the world. Transparency laws enacted in California, on the other hand, would affect Google’s international advertising business—by far the biggest ad tech company in the world.

Beyond brand and consumer issues, the unregulated nature of the digital advertising landscape is a direct threat to democracy. In the US, for instance, presidential campaign spending remains effectively unregulated. It is estimated that the presidential campaigns will spend up to $2 billion (£1.5 billion) on digital advertising in 2024. With current laws, we will likely have no external data about their refunds or rates.

In 2025, the legislative pressure is on for big tech companies to regulate ad technology.

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